Skate n Surf began operations on 1 June, buying and selling surfboards, skateboards, wetsuits and the protective gear for skateboarding. The structure of the business is that of a sole trader. The business employed a sales assistant during the month who is to be paid fortnightly. Tax is deducted from the employees wages (PAYG withholding tax) and remitted to the Australian Taxation Office (ATO) on a quarterly basis. The business has not registered with the ATO for the goods and services tax (GST) and has elected to use the accrual basis of accounting. Accounting records The business records all transactions in the general journal. These transactions are then posted to the appropriate account(s) in the general ledger. The accounts receivable and accounts payable subsidiary ledgers are provided for information only, you are not required to post to these ledgers. Chart of accounts The chart of accounts for Skate n Surf contains the accounts and account numbers below:

Prepare a trial balance as at 30 June. Schedules of accounts receivable and accounts payable will be provided.

100 Cash at bank 110 Accounts receivable 120 Inventory 130 Prepaid insurance 171 Shop equipment (cost) 172 Accumulated depreciation - shop equipment 200 Accounts payable 210 PAYG withholding payable 220 Superannuation payable 230 Bank loan 300 Capital 310 Drawings 320 Profit or loss summary 400 Sales revenue 410 Sales returns and allowances 420 Discount received 500 Cost of sales 600 Advertising expense 610 Depreciation expense 620 Discount allowed 630 Electricity expense 640 Insurance expense 650 Interest expense 660 Postage and stationery expense 670 Superannuation expense 680 Telephone expense 690 Wages expense Transactions June 1 The owner opened a bank account for the business with a deposit of $20,000. This is capital provided by him. 1 Purchased display stands, shelving etc. (shop equipment) from Shop Displays Pty Ltd for $27,000 and computer equipment for the shop from Computer Wizards for $4,200. These were paid for with a loan of $24,000 from the bank and cheque for $7,200 from the business bank account. The bank loan is repayable over 4 years. 1 Paid $3,930 for a 1-year insurance policy covering fire, theft, and public liability. 2 Purchased inventory (skateboards and protective gear) from Excitement plus for $21,600 on terms on net 30. 5 Cash purchase of postage stamps and stationery from Australia Post for $440. 7 Purchased surfboards and wetsuits from Surf Imports for $18,250 on terms of 10/10, n/30. 8 Paid $1,500 to Local Newspapers for advertising for the shop for the month. 8 Paid Surf Imports the amount owing to them less the prompt payment discount. 11 Credit sale to Surfing World of various inventory items for $7,140 (cost of sales $3,630). Terms net 30. 12 Credit sale to Academy Diving School of 13 wetsuits at a discounted price of $250 each on terms of net 15. Cost of sales $2,800. 13 Credit sale to Serious Fun of skateboards and protective gear for $4,000 (cost of sales $2,000). This customer was given terms of 5/10, n/30. 14 Cash sale of a skateboard and protective gear for $500 (cost of sales $230). 18 Received a cheque from Serious Fun for the amount owing by them after deducting the prompt payment discount. 23 Cash sale of inventory to the value of $910 (cost of sales $410). 24 Issued an adjustment note (credit note) to Academy Diving School for 2 wetsuits at $250 each that was not the size they required. The cost of the wetsuits to us was $310 and they were put back into inventory. 25 Paid Excitement plus $4,800 of the amount owing to them. 26 Credit sale to Serious Fun of skateboards for $7,000 (cost of sales $3,000). Terms 5/10, n/30. 27 Purchased wetsuits from Surf Imports for $6,800 on terms of 10/10, n/30. 27 Received and banked a cheque from Academy Diving School for the amount owing by them. 30 Paid Energy Australia $240 for electricity expenses. 30 The owner cashed a cheque for $1,820 to pay wages to Scott Walker the sales assistant of $820 less PAYG Withholding of $50, and $1,050 drawings for himself. The June transactions above have been journalised and posted. Cash at bank Date Details June 1 Capital 14 Sales revenue 18 Accounts receivable 23 Sales revenue 27 Accounts receivable No.100 Credit 7,200 3,930 440 Debit Date Details 20,000 June 1 Shop equipment (cost) 500 1 Prepaid insurance 3,800 5 Postage and stationery expense 910 8 Advertising expense 2,750 8 Accounts payable 25 Accounts payable 30 Electricity expense 30 Wages expense 30 Drawings 1,500 16,425 4,800 240 770 1,050 No.110 Credit 3,800 Accounts receivable Date Details June 11 Sales revenue 12 Sales revenue 13 Sales revenue 26 Sales revenue Debit Date Details 7,140 June 18 Cash at bank 3,250 18 Discount allowed 4,000 24 Sales returns and allowances 7,000 27 Cash at bank 200 500 2,750 Inventory Date Details June 2 Accounts payable 7 Accounts payable 24 Cost of sales 27 Accounts payable Debit Date Details 21,600 June 11 Cost of sales 18,250 12 Cost of sales 310 13 Cost of sales 6,800 14 Cost of sales 23 Cost of sales 26 Cost of sales No.120 Credit 3,630 2,800 2,000 230 410 3,000 Prepaid insurance Date Details June 1 Cash at bank No.130 Credit Date Details Debit 3,930 No.171 Credit Date Details Shop equipment (cost) Date Details June 1 Bank loan June 1 Cash at bank Debit 24,000 7,200 Details Accounts payable Date Details Ju 8 Cash at bank 8 Discount received 25 Cash at bank Debit Date 16,425 June 2 Inventory 1,825 7 Inventory 4,800 27 Inventory No.200 Credit 21,600 18,250 6,800 PAYG withholding payable Date Details Debit Date Details June 30 Wages expense No.210 Credit 50 Bank loan Date Details Debit Date Details June 1 Shop equipment (cost) No.230 Credit 24,000 No.300 Capital Date Details Debit Date June Details 1 Cash at bank Credit 20,000 Drawings Date Details June 30 Cash at bank No.310 Credit Date Details Debit 1,050 Sales revenue Date Details Debit Date Details June 11 Accounts receivable 12 Accounts receivable 13 Accounts receivable 14 Cash at bank 23 Cash at bank 26 Accounts receivable No.400 Credit 7,140 3,250 4,000 500 910 7,000 No.410 Sales returns and allowances Date Details June 24 Accounts receivable Debit Date Details Credit 500 Discount received Date Details Debit Date Details June 8 Accounts payable No.420 Credit 1,825 No.500 Credit Details Details 310 Cost of sales Date June 11 Inventory 12 Inventory 13 Inventory 14 Inventory 23 Inventory 26 Inventory Debit Date 3,630 June 24 Inventory 2,800 2,000 230 410 3,000 No.600 Advertising expense Date Details June 8 Cash at bank Date Details Credit Debit 1,500 Discount allowed Date Details June 18 Accounts receivable No.620 Credit Debit Date Details 200 Electricity expense Date Details June 30 Cash at bank No.630 Credit Debit Date Details 240 No.660 Postage and stationery expense Date Details June 5 Cash at bank Debit Date Details Credit 440 No.690 Credit Debit Date Details Wages expense Date Details June 30 Cash at bank 30 PAYG withholding payable 770 50 Accounts receivable subsidiary ledger Credit Debit 3,250 500 2,750 Academy Diving School Date Explanation June 12 Invoice 24 Adjustment note 27 Receipt Serious Fun Date Explanation June 13 Invoice 18 Receipt 26 Invoice Surfng World Date Explanation June 11 Invoice Debit Credit Acct code: ADI Balance 3,250 Dr 2,750 Dr 0 Acct code: SFU Balance 4,000 Dr 0 7,000 Dr Acct code: SWO Balance 7,140 Dr 4,000 4,000 7,000 Debit Credit 7,140 Accounts payable subsidiary ledger Debit Credit 21,600 4,800 Excitement Plus Date Explanation June 2 Invoice 25 Payment Surf Imports Date Explanation June 7 Invoice 8 Payment 27 Invoice Acct code: EPL Balance 21,600 16,800 Acct code: SIM Balance 18,250 0 6,800 Debit Credit 18,250 18,250 6,800 Trial balance as at 30 June 20XX Debit Credit Account no. Account 100 Cash at bank $ 110 v Accounts receivable 120 Inventory 33,980 130 Prepaid insurance 171 v Shop equipment (cost) 200 Accounts payable 210 v PAYG withholding payable 230 V Bank loan 300 V Capital 310 v Drawings 400 V Sales revenue 410 V Sales returns and allowan 420 Discount received 500 Cost of sales 600 V Advertising expense Discount allowed 620 630 v Electricity expense Postage and stationery ex 660 690 V Wages expense